Valuation

How Can A Valuation Help The Owners Of SMEs?

As the owner of a small to medium sized business you have a pretty good idea how the business is doing day to day. But, what about the bigger picture? Once you’re reliably producing a profit, the definition of how well the business is doing shifts somewhat to include how much the business is worth as an asset in your portfolio. This is just the same as the shareholder of a publicly-traded company monitoring the share price as an indicator of how well the business is progressing. Here are a number of other reasons you might want to understand the intrinsic value of your business:

  1. Develop a plan to increase its value
  2. Determining your personal net worth
  3. Obtaining finance for business growth
  4. Offering shares to employees
  5. Management buy-in
  6. Executing clauses in a shareholders agreement e.g. a buy-sell clause
  7. Marital dissolution
  8. Gifting shares to family members
  9. Seeing the bigger picture of your business performance
  10. Measuring the long-term impact of decisions, not just the short term impact on profit
  11. Understanding the impact of investments when those impacts don’t appear on the balance sheet
  12. Insurance purposes
  13. Preparing for a merger, acquisition or sale of a business
  14. Satisfying curiosity

There are many different ways to value a business. Some are more suited to one business than another and some are more suited to one purpose, listed above, than another. Our business valuation specialists will work with you to develop the most appropriate valuation for your business and purpose.

While a Fair Market Valuation can cost in the region of £3000 – £10000 or more, you’re more likely to need what’s called an Open Market Valuation. This is a practical assessment of what your business could be worth on the open market given its particular capabilities and the state of the market and costs considerably less than a Fair Market Valuation.

Get in touch to discuss why you’d like a valuation and we’ll explain the best option for you. Alternatively, if you’re just looking for a quick evaluation, use our online Business Valuation Calculator here.

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